Top Trade Ideas for the Week of October 1, 2012: The Rest
- Posted by Greg Harmon
- on September 30th, 2012
Here are the Rest of the Top 10:
Agco, Ticker: $AGCO
Agco, $AGCO, has been consolidating in a broad range between 40 and 50 but looks more attractive on a shorter scale. Moving from 42 over the 200 day Simple moving Average (SMA) recently it is now consolidating in a bull flag. The Measured Move higher out of the flag takes it to 53. The Relative Strength Index (RSI) is bullish and moving higher with a Moving Average Convergence Divergence indicator (MACD) that averted a cross to negative. Both support a move higher, and the 3-box reversal Point and Figure chart (PnF) carries a price objective of 61.
Cigna, Ticker: $CI
Cigna, $CI, is building a bull flag after a long run off the bottom at 39. It has a RSI that is bullish and a MACD that is negative, but stalling, often seen in a flag. A break of the flag higher has a Measured Move to 50.50 and the PnF suggests it may have legs higher to 62.
Davita, Ticker: $DVA
Davita, $DVA, is breaking a rising channel higher after consolidating in ti for nearly 3 months. The Measured Move higher takes it to 123. The RSI is bullish and rising and the MACD is positive and increasing, both supporting further upside. The PnF is biased higher as well with a price objective to 141.
Fomento Economico Mexicano, Ticker: $FMX
Fomento Economico Mexicano, $FMX, is building a bull flag as well. The Measured Move higher takes it first to 97 and then to 101. the PnF also sees it higher with a price objective to 116. The RSI has worked off a technically overbought condition and is rising and the MACD is positive and looks to avert a cross to negative. Both support further upside.
Tata Motors, Ticker: $TTM
Tata Motors, $TTM, is building a bull flag between 24 and 26 after a run up fro a base at 22. This would carry a Measured Move higher to 30 on a break of the flag, short of the PnF price objective of 34.50. The rising and bullish RSI and MACD that is turning back higher after a touch at the zero line both support further upside.
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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Saturday which, as the 4th Quarter begins sees more signs of short term weakness in the Equity markets. Gold looks strong though and ready to move higher while Crude Oil has an upward bias but needs to confirm it. The US Dollar Index looks poised to continue the bounce in the downtrend while US Treasuries are biased higher, but consolidating. The Shanghai Composite is set up to continue its bounce in the downtrend with Emerging Markets looking to continue lower off of resistance. Volatility looks to remain subdued though making the picture for the equity index ETF’s SPY, IWM and QQQ, mixed. Low Volatility gives a tailwind, but rising US Dollar and Treasuries give Equities a downside bias. The charts of the SPY, IWM and QQQ break the tie by supporting a short term pullback within their uptrends. Use this information as you prepare for the coming week and trade’m well.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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